PERTH (miningweekly.com) – Uranium and base metals explorer Encounter Resources has entered into an earn-in agreement with Antofagasta Minerals in a deal valued at $6-million.

Under the terms of the agreement, Antofagasta would earn a 51% interest in the tenements making up the Lookout Rocks copper prospect, in Western Australia, by spending $2-million within the first two years.

An initial aircor/reverse circulation programme was expected to start in August.

If the company elected to withdraw from the earn-in and joint venture (JV) agreement prior to spending $2-million, Antofagasta would not retain any interest in the tenements.

The earn-in partner could, however, elect to spend a further $4-million on exploration within a further two years, to earn another 19% interest in the tenements, taking its shareholding to 70%.

In the event of a decision to mine, Antofagasta would make a further $3-million payment to Encounter.

Encounter MD Will Robinson said on Thursday that, with Antofagasta now focusing its attention on the Lookout Rocks copper prospect, Encounter would, once again, regain a 100% shareholding of the BM1 and BM7 copper targets, which had been the subject of an earlier earn-in agreement with Antofagasta.

To date, Antofagasta has spent some A$7.5-million on exploring two targets, and a total of 16 diamond drill holes were completed over the last two years. Robinson said the exploration programme made several key advances, including the first intersection of high-grade copper sulphide mineralisation at BM7, and the extension of high-grade copper oxide mineralisation at BM1.

Encounter was now planning a reverse circulation drilling campaign at the two targets, starting in October, which would test the defined vectors at a number of drill-ready prospects.

The new drilling campaign would be performed either alone or in conjunction with a new JV partner, Robinson added.